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If House Price Forecasts Are On The Money It Will Become "unaffordable To Exist" In Britain

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http://www.telegraph.co.uk/finance/property/11625575/If-house-price-forecasts-are-on-the-money-it-will-become-unaffordable-to-exist-in-Britain.html

If house prices surge again without a radical increase in new homes it will become "unaffordable to exist" in parts of Britain for the young, the property group JLL has warned.

The cost of the average house in the UK will rise by 22.8pc over the next five years, according to the company's latest forecast, while prices in the supply-stricken Greater London are predicted to climb 29.4pc.

Adam Challis, head of residential research at JLL, has issued a stark warning that the long term squeeze on affordability, created by a lack of supply of new homes and a burgeoning population, could have a direct impact on the UK economy.

An interesting headline, but can't bring themselves to admit properties need to come down in value to become affordable.

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If prices rise - a radical increase in new homes=people wont be able to exist.

so lets look at the logic used and change one of the conditions

if prices rise + a radical increase in new homes......what is the new result?

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http://www.telegraph.co.uk/finance/property/11625575/If-house-price-forecasts-are-on-the-money-it-will-become-unaffordable-to-exist-in-Britain.html

An interesting headline, but can't bring themselves to admit properties need to come down in value to become affordable.

Now with all time low mortgage rates and 7 years of bankers stealing savers/workers money to keep their ponzi going we are in exactly the same place as 2007, i.e. house prices need to halve.

Its timer the bankers were tried for fraud/corruption or even treason ( which I believe is still punishable by death ).

Roll on the 2nd leg of the collapse.

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It already is unaffordable.

An ex-chemical research site just off the M11 near Cambridge has been decontaminated. It took about 2 years of daily spraying for the chemical smell to go and someone I know who used to work there said he'd never consider living there given what was done on that site.

They've just started building bog standard mass builder houses on the site so I thought I'd look them up

http://www.rightmove.co.uk/developer/branch/Redrow-Homes/Sanderson-Manor-139127.html

3 bedders from £520k (and look at the floor plans, it is quite small) up to from £780k for 5 bedders.

So the cheapest house on an ex-chemical research site next to a motorway is £520k.

Who has that kind of money to be spending on a house?!

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It already is unaffordable.

An ex-chemical research site just off the M11 near Cambridge has been decontaminated. It took about 2 years of daily spraying for the chemical smell to go and someone I know who used to work there said he'd never consider living there given what was done on that site.

They've just started building bog standard mass builder houses on the site so I thought I'd look them up

http://www.rightmove.co.uk/developer/branch/Redrow-Homes/Sanderson-Manor-139127.html

3 bedders from £520k (and look at the floor plans, it is quite small) up to from £780k for 5 bedders.

So the cheapest house on an ex-chemical research site next to a motorway is £520k.

Who has that kind of money to be spending on a house?!

Thats mental.

Cambridgeshire was hit quite hard in 2008....looks like it's going to be decimated the next time

Will someone stop this ride, I want to get off

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Guest UK Debt Slave

It already is unaffordable.

An ex-chemical research site just off the M11 near Cambridge has been decontaminated. It took about 2 years of daily spraying for the chemical smell to go and someone I know who used to work there said he'd never consider living there given what was done on that site.

They've just started building bog standard mass builder houses on the site so I thought I'd look them up

http://www.rightmove.co.uk/developer/branch/Redrow-Homes/Sanderson-Manor-139127.html

3 bedders from £520k (and look at the floor plans, it is quite small) up to from £780k for 5 bedders.

So the cheapest house on an ex-chemical research site next to a motorway is £520k.

Who has that kind of money to be spending on a house?!

Absolutely barking bonkers

I feel like I'm living in some kind of state sponsored experiment to see what it will take for people to just give up and go mad.

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I thought it was hard for my daughter up here in the north east looking at 4 bed semi's for £120k.They should be 30% lower.How do people live down south?.The prices are just insane.

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Guest UK Debt Slave

David Cameron to revive right to buy in Queen's Speech

With such massive discounts (35% for houses and 50% for flats) sellers will be tempted to increase asking price until their greed is satisfied.

Precisely

State intervention in markets usually has the opposite effect from the one desired

Perhaps they do it deliberately. Wouldn't surprise me frankly since I'm convinced there is an agenda to abolish private property ownership for everyone except the super rich. In another 20 years, very few people will ever own their own home and many of those remaining home owners will never pay off their huge mortgages.

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Precisely

State intervention in markets usually has the opposite effect from the one desired

Perhaps they do it deliberately. Wouldn't surprise me frankly since I'm convinced there is an agenda to abolish private property ownership for everyone except the super rich. In another 20 years, very few people will ever own their own home and many of those remaining home owners will never pay off their huge mortgages.

It is looking that way isnt it.The government needs to keep the middle working forever to pay tax.Paying off a house is one of the big things in stopping work early/going part time etc etc.If you can trap people out long enough/for good,then retiring before state pension age for most people cant happen.I guess like you say huge mortgage debt that never gets paid has the same affect.

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JLL are a big international listed company and operate at the more corporate end of UK property.

A quick rattle through their 2013 annual report shows that the group had gross operating revenues of about $560 million arising from the UK business and there is a significant UK focus in the geographical distribution of their assets under management, (figure also sourced from the 2013 annual report)

jll%2Bassets.png

Whilst I would argue that a serious investment business like JLL always act in good faith and invest client funds carefully, making investment decisions supported by thorough research, a cynic might contend that by virtue of their property focus JLL might be judged from a certain perspective as a component in the a larger global capital plumbing system that has in the recent past demonstrated a marked tendency to channel hot money into UK property.

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...

Who has that kind of money to be spending on a house?!

I guess the answer to that is a couple, both of whom are on £50k-£60k. The problem is that they'd be at such a high LTI multiple that once the mortgage was paid there would be precious little earned income left to spend on anything else. So whilst a couple like that ought to be rolling in it and spending lavishly into the productive economy we're going to have their income used to make good on the box builder's boom bet on the price of the polluted land. Hurrah!

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Precisely

State intervention in markets usually has the opposite effect from the one desired

Perhaps they do it deliberately. Wouldn't surprise me frankly since I'm convinced there is an agenda to abolish private property ownership for everyone except the super rich. In another 20 years, very few people will ever own their own home and many of those remaining home owners will never pay off their huge mortgages.

I don't think there is a hidden agenda, John Major made houses cheaper and lost big time - those who gained didn't all vote for him but a large proportion of those who lost voted against him.

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We moved to France as we couldn't believe how stupid prices had got. We sold up in 2013 thinking it had gone too far, and it looks like we've hindered ourselves to about 20% more money, but I couldn't have held on. We're looking at 5 bed houses with a pool and 2-10 acres here for €350k, which I am told by the locals we'd be foolish not to go in 30% lower, so for about £170k I get 5 beds, pool, up to 20 acres and better weather (and it's cheaper to fly in to work than it is to take the train (Train is £220 a week from Taunton to London Return, Toulouse £120-180).

I love England, always have, but it's really going downhill, and downhill quickly.

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Good luck to them all, I am not stressing about UK property at all as I now refuse to participate.

I was told the other day by a man driving a twenty year old car that 200k for a house was not a lot of money, People have lost all sense of reason and scale so good luck to them. I will happily live in a tent before i spend my lifes labours on a couple of grands worth of bricks on a chemical waste site.

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At least Greater Stricken London will still have the biggest house price rises in the next 5 years - and it's supposed to be Greece that's bankrupt.

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Guest UK Debt Slave

I don't think there is a hidden agenda, John Major made houses cheaper and lost big time - those who gained didn't all vote for him but a large proportion of those who lost voted against him.

John Major didn't make house prices cheaper

Geogre Soros forced Sterling out of the ERM and forced Norman Lamont to sell a large tranche of the UK Treasury gold reserves to prop up our currency.

The resulting recession was caused by interest rates climbing as high as 15%

Imagine 15% interest rates now!!!! It would cause society to collapse altogether

Edited by UK Debt Slave

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For sure London will top the world's most expensive house prices league displacing Monaco. Currently London is 2nd only to Monaco.

That'll no doubt be hailed as an "achievement".

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Guest UK Debt Slave

For sure London will top the world's most expensive house prices league displacing Monaco. Currently London is 2nd only to Monaco.

That'll no doubt be hailed as an "achievement".

London will be socially cleansed of anyone less that "extremely wealthy", indeed, the process is well underway.

If this kind of thing had happened in a capital city at any other time in history, there would have been a revolution.

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So what will happen to all the standard family terrace houses in London? Will they be bought up by foreign investors or BTLers? Will London be full of people renting rooms or renting beds? Are there enough foreign investors/BTLers to buy all these up at ever increasing prices? And what kind of people will be able to afford to even rent a room in London? What kind of jobs will they have and why would they stay in London if all their money goes on rent?

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John Major didn't make house prices cheaper

Geogre Soros forced Sterling out of the ERM and forced Norman Lamont to sell a large tranche of the UK Treasury gold reserves to prop up our currency.

The resulting recession was caused by interest rates climbing as high as 15%

Imagine 15% interest rates now!!!! It would cause society to collapse altogether

Imagine the demand on toilet paper and the sewers if IR rose to 6%, let alone 15%. Riots I'd imagine...

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Guest UK Debt Slave

So what will happen to all the standard family terrace houses in London? Will they be bought up by foreign investors or BTLers? Will London be full of people renting rooms or renting beds? Are there enough foreign investors/BTLers to buy all these up at ever increasing prices? And what kind of people will be able to afford to even rent a room in London? What kind of jobs will they have and why would they stay in London if all their money goes on rent?

It will become impossible for people even to rent in London unless living space becomes even smaller and existing flats and apartments are subdivided into even smaller living spaces. Otherwise, how will landlords service their mortgages.

Basically, ordinary working people are being "socially cleansed" from London.

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